• Total Trading Volume: USD163 billion.
• Cash Equity Trading Volume: USD41.4 billion, increased 54% quarter-over-quarter.
• Commission Income: USD41.2 million, up 21% quarter-over-quarter and 78% year-over-year.
• Interest Income: USD48 million, increased 9% quarter-over-quarter.
• Total Revenue: USD101 million, a 16% increase quarter-over-quarter and 44% year-over-year.
• GAAP Net Income: USD17.8 million, up 34% year-over-year.
• Non-GAAP Net Income: USD20.1 million, increased 26% year-over-year.
• Operating Profit Margin: 26% in the third quarter.
• Newly Funded Accounts: 50,500, a 3% sequential increase and 105% year-over-year increase.
• Total Client Assets: USD40.8 billion, up 7% quarter-over-quarter and 116% year-over-year.
• Interest Expense: USD15.7 million, increased 29% year-over-year.
• Employee Compensation and Benefits: USD28.8 million, up 11% year-over-year.
• Marketing Expense: USD8.2 million, increased 59% year-over-year.
• Total Operating Costs: USD59.3 million, up 22% year-over-year.

• Warning! GuruFocus has detected 3 Warning Signs with TIGR.

Release Date: November 12, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• UP Fintech Holding Ltd (NASDAQ:TIGR) achieved a record total trading volume of USD163 billion in Q3 2024, driven by an expanded client base and active market conditions.
• Commission income reached USD41.2 million, marking a 21% increase quarter over quarter and a 78% increase year over year, the highest in the past three years.
• The company reported an all-time high total revenue of USD101 million for Q3 2024, a 16% increase quarter over quarter and a 44% increase year over year.
• UP Fintech added 50,500 newly funded accounts in Q3 2024, a 3% sequential increase and a 105% increase year over year, with significant contributions from Singapore and Southeast Asia.
• The company's wealth management AUM increased over 40% quarter over quarter and doubled year over year, exceeding USD1 billion.

Negative Points

• Interest expense increased by 29% from the same quarter last year, aligning with the growth of margin and security lending balances.
• The cash equities take rate slightly decreased from 6.7 bps to 6.4 bps this quarter, impacting overall profitability.
• Marketing expenses rose by 59% year over year to USD8.2 million, reflecting increased spending on customer acquisition and branding campaigns.
• General and administrative expenses increased by 27% year over year due to higher professional service fees and business expansion costs.
• The company experienced a foreign exchange loss of approximately USD5.1 million in Q3 2024, impacting subsidiaries that do not use the US dollar as their base currency.

Q & A Highlights

Q: Can you provide a breakdown of the regional mix of newly funded accounts and explain the reasons behind the decline in the blended take rate and cash equity take rate? A: (Tianhua Wu, CEO) In the third quarter, about 60% of newly funded users came from Singapore and Southeast Asia, 15% each from Australia, New Zealand, and Hong Kong, and over 5% from the US. (Fei Zeng, CFO) The decline in the blended take rate is due to increased futures trading volume, which is based on nominal value. The cash equity take rate dropped due to higher average stock prices and a lower proportion of ADRs. NVIDIA's stock split had a minor impact on the take rate.

Q: Could you share the run rate for assets, trading volume, revenue, and profit since October, and discuss the improvement in operating efficiency and leverage? A: (Fei Zeng, CFO) October saw a strong net inflow of client assets, with trading volume and commission performance reaching record highs. Trading volume and commissions for October more than doubled the average monthly performance for the first half of the year. Operating profit grew by 45% quarter over quarter, indicating improved operating leverage.

Q: What is the current business progress in the Hong Kong market, and how is the wealth management business performing? A: (Tianhua Wu, CEO) We have seen significant growth in Hong Kong, with over 20,000 funded users and high average client assets. The ARPU for Hong Kong retail users was the highest across regions. (Fei Zeng, CFO) Wealth management AUM increased over 40% quarter over quarter, exceeding USD1 billion. In Hong Kong, the number of wealth management clients grew by nearly 50% quarter over quarter.

Q: How has the market backdrop since October affected your business, and what are your expectations for Q4? A: (Fei Zeng, CFO) October was a standout month with record trading volumes and commissions. While there are uncertainties related to post-election initiatives and Federal Reserve decisions, we are satisfied with Q4's performance so far.

Q: Can you elaborate on the impact of foreign exchange losses and how they affect your financials? A: (Fei Zeng, CFO) The depreciation of the US dollar led to foreign exchange losses of around USD5.1 million, which were non-cash and non-operating. Despite this, operating profit increased significantly, demonstrating improved operating leverage.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.